Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q3 2013 Earnings Presentation
25 slides from Vistance Networks's earnings presentation, Nov 7, 2013
Slide 1: Third Quarter 2013 Results
Third Quarter 2013 Results November 7, 2013 Eddie Edwards • President and Chief Executive Officer Mark Olson • Executive Vice President and Chief Financial Officer
Slide 2: Safe Harbor
Safe Harbor Caution Regarding Forward Looking Statements During this presentation, oral or written statements made by us or on our behalf may include forward-looking statements which reflect our current views with respect to future events and financial performance. These forward looking statements a
Slide 3: Agenda
Agenda • CommScope Overview • Financial Priorities and Long-Term Targets • Third Quarter Review • Fourth Quarter 2013 Outlook • Investment Highlights 3
Slide 4: CommScope Overview
CommScope Overview CommScope is a leading global provider of Operating Wireless Enterprise Broadband essential communications infrastructure Segments #1 in merchant Radio Frequency Segment $2.2b $0.8b $0.5b network connectivity solutions and Revenue Wireless small cell DAS solutions--for % of Total
Slide 5: CommScope Evolution Since Take Private
CommScope Evolution Since Take Private 2010 Now Market • 2G 3G+ LTE deployment Data center Drivers (coverage and growth and • Growing video content capacity) intelligence Transforming Offerings Components Integrated solutions Realign product Strengthened growth Portfolio mix solutions Carrying out S
Slide 6: Financial Priorities
Financial Priorities Drive Cash Flow & Grow Revenue Expand Earnings Manage Capital Structure • Profitable organic • Expand adjusted • Deploy free cash flow growth operating income strategically margin • Continue to enhance • Profit improvement • Improve working commercial position plans capital effi
Slide 7: Long-Term Targets
Long-Term Targets Net Sales Growth Mid single digits Adjusted Operating Margin % Stable margins Adjusted Net Income Growth Low double digits Free Cash Flow Continued strong free cash flow 7
Slide 8: Q3 2013 Sales & Orders
Q3 2013 Sales & Orders Sales Consolidated Sales (in millions) • Q3 Sales of $888m, stable YOY excluding FX impact of $5m – Positive impact of Wireless sales – Stable Enterprise sales – Lower Broadband sales – Strong North American sales Sales by Segment ($ in millions) somewhat offset by lower sales
Slide 9: Q3 2013 Results
Q3 2013 Results Operating Performance Adjusted Operating Income (in millions) • GAAP Operating Income of $100m • Adjusted Operating Income1 of $162m – Down $3m or 2% YOY – Adjusted operating margin of 18% Interest and Taxes • Interest Expense of $54m • Income Tax Expense of $32m Adjusted Operating I
Slide 10: Wireless Segment
Wireless Segment Global Leader in RF Infrastructure Solutions Wireless Sales Base Station Antennas (in millions) Solutions and Services Integrated Cables and Microwave Solutions Connectivity Antennas and Products Offering Adjusted Operating Income Base Station (in millions) Subsystems Distributed Co
Slide 11: Enterprise Segment
Enterprise Segment Structured Cabling and Connectivity Solutions Enterprise Sales (in millions) In-Building Cellular Data Center Solutions Adjusted Operating Income (in millions) Commercial Building Solutions 11 See appendix for reconciliation. Components may not sum to total due to rounding.
Slide 12: Broadband Segment
Broadband Segment Coaxial and Fiber Optic Cable and Solutions for Cable Operators Broadband Sales (in millions) Adjusted Operating Income (in millions) • Coaxial Cable • FTTX Solutions • Cable in Conduit • Edge QAM • Fiber Cable 12 See appendix for reconciliation. Components may not sum to total due
Slide 13: Cash Flow and Liquidity
Cash Flow and Liquidity Cash Flow Highlights LTM LTM (in millions) Q3 2013 Q3 2012 Q3 2013 Q3 2012 Cash Flow from Operations $ 127 $ 35 $ 383 $ 200 Capital Expenditures (12) (6) (36) (31) Free Cash Flow $ 115 $ 28 $ 347 $ 169 Cash Taxes Paid $ 19 $ 21 $ 94 $ 62 Cash Interest Paid 73 67 167 175 Cash
Slide 14: Capital Structure Summary
Capital Structure Summary (Unaudited -- in millions) Q3 2013 Cash & Cash Equivalents $ 312 Net Leverage Ratio1 Debt 8.25% Notes $ 1,500 Term Loan 975 6.625% Notes 550 Revolver - Other Debt 1 OID (11) Total Debt $ 3,015 2 Stockholders' Equity $ 658 Total Capitalization $ 3,673 1. Represents Net Debt
Slide 15: Outlook
Outlook Fourth Quarter 2013 • Revenue of $800m - $840m • Adjusted operating income of $125m - $145m, excluding amortization of purchased intangibles, restructuring and other special items • Adjusted effective tax rate of 38% – 42% • Adjusted EPS of $0.25 - $0.31, based on ~182m diluted shares outsta
Slide 16: Investment Highlights
Investment Highlights • Wireless: Global transition to 4G/LTE, Small Cell DAS, backhaul and backup power Attractive and Growing End • Enterprise: Data center growth, in-building cellular, network intelligence Markets and intelligent buildings • Broadband: Multi-screen and web-based video and network
Slide 17: Appendix
COMMSCOPE" Appendix
Slide 18: Income Statement
Income Statement CommScope Holding Company, Inc. Condensed Consolidated Statements of Operations (Unaudited -- In thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Net sales $ 888,011 $ 894,019 $ 2,633,559 $ 2,473,674 Operating
Slide 19: Balance Sheet
Balance Sheet CommScope Holding Company, Inc. Condensed Consolidated Balance Sheets (Unaudited -- In thousands, except share amounts) September 30, 2013 December 31, 2012 Assets Cash and cash equivalents $ 312,045 $ 264,375 Accounts receivable, less allowance for doubtful accounts of $13,452 and $14
Slide 20: Cash Flow
Cash Flow CommScope Holding Company, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited -- In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Operating Activities: Net income (loss) $ 11,287 $ 5,284 $ 28,309 $ (6,097) Adjustments to reconc
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures (Unaudited -- In millions, except per share amounts) Thre e Months Ende d Nine Months Ende d Se pte mbe r 30, 2013 Se pte mbe r 30, 2013 O pe rating Ne t Dilute d O pe ra
Slide 22: Segment Details
Segment Details Net Sales by Segment % Change Q3 2012 Q2 2013 Q3 2013 YOY Sequential Wireless $ 535.5 $ 591.5 $ 552.6 3.2 % (6.6) % Enterprise 212.0 218.7 212.2 0.1 % (3.0) % Broadband 148.0 132.8 124.6 (15.8) % (6.2) % Inter-segment eliminations (1.5) (2.1) (1.4) n/a n/a Total Net Sales $ 894.0 $ 9
Slide 23: 2013 AOI Reconciliation by Segment
2013 AOI Reconciliation by Segment (Unaudited -- In millions) Third Quarter 2013 Non-GAAP Adjusted Operating Income Reconciliation by Segment Wireless Enterprise Broadband Total Operating income (loss), as reported $ 90.3 $ 21.7 $ (12.2) $ 99.8 Amortization of purchased intangible assets 22.0 17.3 4
Slide 24: 2013 AOI Reconciliation by Segment
2013 AOI Reconciliation by Segment (Unaudited -- In millions) Second Quarter 2013 Non-GAAP Adjusted Operating Income Reconciliation by Segment Wireless Enterprise Broadband Total Operating income (loss), as reported $ 93.2 $ 26.6 $ (25.5) $ 94.3 Amortization of purchased intangible assets 22.0 17.1
Slide 25: 2012 AOI Reconciliation by Segment
2012 AOI Reconciliation by Segment (Unaudited -- In millions) Fourth Quarter 2012 Non-GAAP Adjusted Operating Income Reconciliation by Segment Wireless Enterprise Broadband Total Operating income, as reported $ 41.3 $ 26.1 $ 1.6 $ 69.1 Amortization of purchased intangible assets 22.0 16.6 4.6 43.3 R
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